Hollywood hit with surprising drop in video-on-demand rentals

“After two years of modest growth, total U.S. revenue from in-home viewing of movies dropped 1.8% to $17.8 billion in 2014, according to new data from the Digital Entertainment Group trade association,” Ben Fritz reports for The Wall Street Journal. “Last year’s drop was driven by continued declines in sales and rentals of physical DVDs along with a surprising drop in video-on-demand rentals. After many years of growth, VOD rentals from cable, satellite and Internet providers fell 6.7% to $1.97 billion last year.”

“Studio executives attributed the overall drop in 2014 home-entertainment revenue in part weak results at the domestic box office last year. If movies weren’t popular in the theater, there will be less demand to watch them at home,” Fritz reports. “As reported, overall North American box-office receipts for 2014 declined more than 5% to $10.35 billion from $10.92 billion in 2013, according to box-office tracker Rentrak Corp. — the worst results since 2011. Attendance for 2014 was also down, but final data on ticket sales for the year isn’t available yet.”

“The best news for the movie industry was 30% growth in digital sales, to $1.551 billion,” Fritz reports. “Sales of films from online retailers such as Apple Inc. and Comcast Corp. are the most profitable type of home entertainment transactions and a category studios have focused intently on growing.”

Read more in the full article here.

31 Comments

    1. The real culprit is the dismally awful movies that are being churned out. You have your choice of comic book heroes, 90 minutes of battle scenes and/or car chases, or Dumb & Dumber sequels. There are no “Casablanca” or “Godfather” caliber movies being made anymore. There are no actors of the caliber of a DeNiro, Pacino, or Brando anymore. Instead we have Adam Sandler and Lindsay Lohan. It’s all formula schlock these days, written by people who can’t write, for actors who can’t act, led by directors and producers without a clue. They even manage to completely screw up great stories like “The Girl with the Dragon Tattoo”, which was a cyber-thriller book, but which was turned into an action adventure movie complete with car chases.

      1. There are good movies being made, but most rarely seethe light of day outside of a handful of art movie theaters. Like you said, the big studios are all about comic book, fantasy, kiddies and racial retreads (Redheaded Orphan Annie is now an African-American girl!?!).

      2. Spot on, Zeke. The only thing missing from your list is the endless CGI battle scenes in many movies that throw mind numbing volume of special effects to thundering beats for 20 minutes at a stretch.

        As you pointed out, what is missing today is meaningful dialogue and a well acted plot. Today we are treated to computer graphics, soundtracks and posturing.

        An excellent exame of smart, witty dialogue and great acting is “All About Eve.” Sigh …

        1. A couple of the really good modern (more or less) movies that come to mind are “Body Heat” and “Cannery Row”. They have excellent character development, excellent plots, and great acting.

      3. Agree 100%. Same thing going on in the Music business. Every once in a while a great movie comes out. But they used to make more great movies in one year than they do in a decade now. A big part of the blame is the American audience. But when the audience has no choice but to go to half-assed movies or listen to BS music, they will still try them. Sadly, only a 6.7%. If 25% voted no! we might actually get some results.

    2. While I certainly appreciate the instant gratification of digital downloads, why pay $4 – $6 for a digital download when I can rent the Bluray from RedBox for $2?

      Much better quality and no streaming issues.

  1. When I was a child, my brother would take me to the movies on Saturday. 1 Ticket was $1.75 for the Matinee, popcorn and candy just as cheap. Has anyone seen the prices lately at the movies? Has anyone noticed that these morons show commercials in a place you should not be seeing them? I use to go to movies because of the cheap price and to escape the commercials, not so much anymore. That’s what happens when you become greedy!

          1. Going to the Drive In with a hot girl beside you in the front seat and two other couples hidden in the trunk.

            $6 covered the movie and pop, hot dogs and popcorn for three couples.

            We sure could rock that car on bad movie nights.

            If you watched the movie, it really had to be a great flick.

  2. Hollywood: it’s piracy!

    Movie watcher: it’s crap movies.

    I think people realize that any movie in theaters will be on dvd/vod in a few months.. So after watching it in a theater, why buy it 2 months later? (Unless you think it’s that good)

    Example, Fury in theaters end of October, now on vod by end of December.. (Don’t know exact date but Pretty sure I saw it last week for rent)

    It used to be 6 months to a year before it was available for rent/buy. Now Hollywood wants as much money as they can as quick as they can.. Theater to home in about 3 months.

    Fox just set a new box office record in a year.. So people are going to the theaters, but maybe not buying the movie a few months later.

  3. In reference to VOD decline it’s cause the movies are so expensive. $6, $7 for a 24 hour rental? Drop it to $3 max and I’ll rent all the time, not like it costs a lot to stream a movie.

  4. So 30% growth in digital sales to 1.55B = +$465M
    1.8% drop in rentals of 17.8B = -$320B
    ————————————
    = $145M increase in total sales

    What is the WSJ’s agenda in painting a negative picture of what is actually a positive net result for Hollywood?

  5. Lots of pc crap in the movies these days on so many levels, and so banal as well. No surprise that they have alienated half the potential audience, in fact the half that have the most money. And the stuff that comes to of the south of these ‘stars’ is so moronic. No surprises here. And so it goes…

  6. Favourite movie “Singing in the rain”, although … given my mood on the day, when someone asks “wot’s yer fav flx?” – Kung Fu Hustle is in my top 5. Stephen Chow is a legend, his obeisance to cinematic culture rocks.

    Re Hollywood’s woes, I like this recent piece by M.G. Siegler.
    A general partner at Google Ventures, Siegler’s observations, re Apple (and other topics) are often erudite, edifying and enlightening.

    View at Medium.com
    or – parislemon.com

  7. The reason why cinemas charge so much for popcorn is that for the first “n” showings (don’t know the exact number), the entire box office receipts go to the studio so the only place to make money is on concessions, advertising and space rental.

    Theaters that show older movies don’t have that constraint so they can charge less for admission and also for concessions but take a large percentage of the revenue.

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